Why any of this

The point of this plan is to get to December 1st with all four of these still possible.

• Merge with a larger organisation.
• Wind down in an orderly way, on our terms.
• Close.
• Continue independently.

If we do nothing, three of the four disappear and only one is left. The cuts are sized to steady the organisation in about 60 days. That tells us where we will be at 90 days while we still have 30 days to change course.

Where we are

Four grants have ended or are ending. Our grant money falls by 65 percent in one year.

Most grant money passes straight through to the cost it pays for. So losing a grant dollar only costs us about ten cents of overhead, as long as the spending stops too. What hurts is grant-funded spending we keep paying after the grant is gone.

Cash

We will not run out of money on some date. We will run out on a payday.

This slide shows every payday between now and November 30th, and how much we expect to have in the bank going into each one. The figures come from our accountant.

• The replacement grant is not enough on its own. Even if we win it, at what we spend today we are still about $16,632 a month short. Please do not treat it as the answer.
• A bridge of roughly $120,000 reaches December 1st on the current model.
• We pay about $94,800 a year in interest, which means we owe somewhere between $1.0 and $1.3 million. No document I have been given says who we owe it to. That is one of the three things I need help with.

What changed

We announced three things on the same day, on purpose.

Spreading them out would mean staff spend three weeks waiting for the next piece of bad news, and that costs us more than the changes themselves. The job cuts happened on one day and are finished. The service changes take months to work through.

The savings

You will see $900,971 attached to that list. This is what we actually keep.

Two of the nine save less than they look like they do. One was paid for entirely by a grant, so ending it saves us nothing this year. Another was 80 percent paid by other programmes and saves about $12,620. Both were still the right call. Neither belongs in a savings figure.

What it costs to do

What it costs us to let nine people go is the one big number I still cannot give you.

We are using $60,000 as a placeholder. The real figure could change how much cash we have on December 1st by as much as $200,000. Ruth is working it out now.

• It has to be worked out under our current leave policy, not the new one. We give people their whole year of leave the day they start, instead of building it up month by month, so someone leaving can still be owed all of it.
• We pay that out in cash in the first week of September, which is the week we can least afford it.
• The state law requiring 60 days notice of layoffs only applies at 75 full-time employees. We have about 55, so it almost certainly does not apply to us. Our lawyer is confirming.

Revenue

The biggest number in this plan is money we could bill for and do not.

One of our own documents says we collect under 60 percent of what we bill. Erin, who runs billing, says 99 percent of our claims get paid and only 1 percent are denied. Both can be true. The 60 percent is probably the normal gap between our list price and what insurers have agreed to pay, which every provider has.

If that is right, our problem is not chasing payments. It is that we never billed for the work at all. We think we bill for somewhere between a third and a half of what we could, which is more money than every job cut in this plan put together. Getting a straight answer on this matters more than anything else on my list.

Six things nobody has worked on: clinicians who are not credentialed and so cannot be billed for at all, a no-show policy with real consequences, running more groups instead of one-to-one sessions, collecting copays at the desk, tracking insurance pre-approvals, and applying the sliding scale the same way every time.

Expenses

$1,223,960 we can cut without anyone losing a job. $933,500 of it is our own money.

$933,500 is what comes off the budget. The cash we actually free up this year is closer to $444,250, because most of these are annual contracts we can only get out of at renewal. I would rather give you the smaller, real number.

Service integration

A third of psychiatry appointments never happen. Your leadership team wrote the fix.

Every psychiatry client now has a named person on the clinical team, not the psychiatrist, keeping track of whether they are showing up, taking their medication, and getting better or worse between appointments. That person does not have to be a therapist. Case management and community support count, and those staff are not among the nine.

A correction I want to make to you directly. Our stabilization plan told you psychiatry no-shows run at 60 percent. That is wrong. It is 14 percent not turning up plus 20 percent cancelling.

The vote

The time off policy is the only thing I need you to vote on today.

Everything else I have shown you is reported to you. The job cuts, the service changes and the spending cuts are management decisions I am accountable for. This one needs a vote because it changes the terms of employment for every member of staff.

This saves nothing on payroll. Salaried staff get paid the same whether they take leave or not. What it is worth is $130,000 to $175,000: a smaller unused-leave liability on our books, smaller payouts when people leave, and more hours our clinicians can bill for. None of that is a payroll saving and I will not describe it as one.

Every full-time employee loses at least a week of leave, and people in their fourth and fifth year lose two. Our lawyer is checking two things first: Illinois usually does not let employers take away vacation someone has already earned, and state law may require part-time sick time.

What could still go wrong

Seven risks I am carrying. Two of them I cannot close on my own.

What I need

Three things I need the board to do.

• Find out who we owe money to. We pay about $94,800 of a year in interest and no document names the lender. I want to talk to them before we breach a loan condition, not after.
• Get us out of nine vehicle leases. The grant that paid for them has ended and we are still paying. This needs a board member who negotiates contracts for a living.
• Get us an employment lawyer. One call covering the nine redundancies, the leave policy, the retirement plan question, and the layoff notice law.

One thing to hold. No employee names appear in anything you have been sent, and none should appear in a reply. These people should hear it from us, not from a neighbour.